ADP: Payrolls Increased 198,000 In February
James Picerno | Mar 07, 2013 01:44AM ET
Private-sector payrolls expanded by 198,000 in February, according to yesterday’s ADP Employment Report. That's down a bit from January's 215,000 advance. Nonetheless, February's increase is strong enough to inspire confidence for expecting that Friday's Labor Department report on payrolls will also profile February as another month of modest growth for jobs creation.
“The job market remains sturdy in the face of significant fiscal headwinds," says Mark Zandi, chief economist of Moody’s Analytics, in the accompanying ADP press release. "Businesses are adding to payrolls more strongly at the start of 2013 with gains across all industries and business sizes. Tax increases and government spending cuts don’t appear to be affecting the job market."
From an econometric perspective, yesterday's ADP report looks encouraging for expecting Friday's government update will show that private payrolls in February matched or exceeded January's 166,000 rise. In each of the three months through January, the ADP estimate exceeded its Labor Department counterpart. That implies that Friday's data will move closer to the ADP's February number.
The reasoning is that the two series are closely correlated over time, with the monthly changes posting an R-squared of 0.91 since 2001, the earliest estimates for the ADP data. In the short term, however, divergences are common. But the long-term history of the two data sets suggest that any divergences will be temporary. As such, the recent divergence looks overdue for a round of narrowing.
Translated: Friday's private-sector payrolls estimate looks likely to meet or exceed the January pace.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.